1. Field of the Invention
The present invention relates generally to the financial service and card product industries, and more specifically, to systems, program products, and associated methods of activating financial and non-financial transaction cards and reloading debit-type and other prepaid payment or other cards using partial authorization messaging.
2. Description of Related Art
It has been known that banks offer and sell bank card products such as debit cards, credit cards, automatic teller machine (ATM) cards, gift cards, and combinations thereof, e.g., ATM/debit card, which provide an alternative payment methodology to that of using cash (hard-currency) or paper checks when making purchases. Such cards typically have advantages that can not be provided by the use of cash. For example, if cash is stolen, even if the thief is caught, it is almost impossible to prove ownership of the cash. Further, the issuers of the cards typically have procedures to absolve or limit liability of the consumer if the theft is reported within a preset time frame. Such cards also can have or provide built in procedures that help prevent usage by less educated thieves. Further, because of the convenience and flexibility, such cards have become a valuable tool used by retailers to provide consumers with rebates, in-store credit, and promotions.
From the aspect of the consumer, use of such cards, particularly debit cards, e.g., pre-paid debit cards, branded gift cards, etc., are functionally similar to writing a check, as the funds are withdrawn directly from either the bank account, or in some cases, from the remaining balance on the card. Although credit cards have been popular for many years, the use of debit-type cards has only more recently become wide-spread, and is still growing. Such use, in fact, in many countries, has quickly moved to a point of becoming more popular than the “paper” check, and at least by volume, in certain instances, has even exceeded the use of cash.
From the aspect of the merchant, there has traditionally been a substantial difference in the methodology of handling debit cards from that of handling credit cards. For example, credit card purchases have traditionally been processed through use of a merchant account affiliated with a credit card payment network such as, for example, Visa®, MasterCard®, American Express®, Discover®, etc., whereas debit card purchases have traditionally been processed through an interbank network such as, for example, Cirrus®, PLUS®, etc.
Debit cards supplied directly by a bank that provide access to funds of a specific user bank savings or checking account have traditionally been mailed directly to the user's address provided by the user for the bank to send monthly bank statements and are activated using a 1-800 number. Other types of the cards, for example, gift and other prepaid cards, however, are generally delivered directly by the merchant. Activation of such prepaid cards has typically been through use of proprietary activation terminals unique to the card issuer's distributor. This type of system is typically referred to as a “closed system.” In one exemplary closed system, at the time of sale, the retail merchant enters a card identifier and a value into a dedicated activation terminal. The activation terminal connects to the computer system of the card issuer's distributor and sends the entered value to request activation of the identified card. Although somewhat functional, such closed systems can be expensive to implement, both monetarily and space wise, due to the requirement for having the dedicated terminal. Further, such systems can limit a merchant's ability to easily switch between different card issuers, as one card issuer's distributor's activation terminal would not be expected to be compatible with a different card issuer's distributor's system.
Some newer types of card systems utilize the multi-application capability of the merchant's standard POS terminals provided by “open systems” payment vendors to permit a “closed system” application to reside in the “open systems” payment terminal. Such systems can allow access to the card issuer via the traditional debit network, through a sponsor bank, or via a direct connection, etc. Such systems, however, can be expensive to implement and can have a significant impact on the point-of-sale system. For example, such systems require substantial software upgrades to the merchant's point-of-sale (“POS”) system. Such upgrades typically have a substantial lag (e.g., six months or more) between the time a merchant requests such upgrades and the time such upgrades are tested and delivered. Accordingly, such systems can also limit a merchant's ability to easily switch between different card issuers, as one card issuer's software upgrades would not be expected to be compatible with a different card issuer's system. Further, such systems can slow down the checkout line as they may require an interruption in the normal register operations once a merchant begins to process the sale of the prepaid card. Recognized by the inventors, however, is that “open systems” nevertheless have the potential for providing the merchant needed flexibility.
These tradition closed and hybrid card systems also characteristically implement the settlement of activation funds as a funding transaction between the merchant and the issuer's distributor and then between the issuer's distributor and the issuer. Such methodology adds a significant delay and risk in protecting and facilitating the accessibility of the customer's money.
Accordingly, recognized by the inventors is the need for a system, apparatus, program product, and methods which can allow activation of gift and other prepaid cards via the merchant's POS system that does not require significant software upgrades, that can use existing POS system communication networks, and that does not require interruption in normal register operations, and that can settle activation funding directly between merchant and issuer in a timely manner.